@testbutton66a wrote:
How do I put this on my taxes? Lawyer sent me a 1099-s. Is my share of the condo fully taxable. Do I only pay taxes on the capitals gains on the condo? Parents purchased for 125k, 20k improvement and we sold it for 165k.
165k was the fair market value. Do I claim 10k as capital gains and my brother claims 10k?
@testbutton66a
Because your parents had a life estate, the condo is treated as if you inherited it when your mother died, not as a gift, even though your parents transferred the title to you while they were still alive. The basis of inherited property is the fair market value on the date of the decedent's death. What your parents paid for it doesn't matter. If you sold it for the fair market value, you have no gain. (This is common when an inherited property is sold soon after the death.) You might even have a small loss if you paid a broker's fee or other selling expenses.
You only pay tax on the gain, not the entire proceeds of the sale. Since you have no gain, you will not have to pay any tax on the sale. Assuming you never rented out the condo, it is considered personal use, so you cannot claim a loss on it. But even though you will not have to pay any tax, you and your brother must each report it on your tax returns. The lawyer should have sent each of you a 1099-S for half the proceeds.
You enter it in TurboTax as the sale of a second home. See the following FAQ for instructions. You cannot report the sale of a second home in TurboTax Deluxe Online. You will have to either upgrade to Premier or higher, or use any edition of the CD/Download TurboTax software.
Where do I enter the sale of a second home, an inherited home, or land on my 2019 taxes?
This answer has been verified for accuracy by an Intuit expert employee
